A server -- also known as a "master" -- is the backbone of your multiplayer session. All of the connected players communicate through the server and the server tells all of them what to do.
A host is a special client that helps direct the basic flow of the game through the server. The host decides when the mission starts, ends, as well as the basic settings and requirements.
A client is all other connected players with no special abilities.
There are two special cases for server and host:
- A standalone acts purely as a server and the first client connecting to a standalone will be the host.
- When you create a server from the games screen you will become both the server and the host.